Pizza Chains Focus on Digital Platform

Published By : 20 May 2016 |Published By : QYRESEARCH

Though unhealthy, pizzas are one of the most consumed fast foods especially among young adults. As young adults constitute the largest user group of mobile devices, fast food companies are cashing on this opportunity by going digital. In its earnings in the first quarter, Papa John’s has revealed that 55% of its sales come through digital channels. The company’s sales through online medium have increased by 50% since the last year. 60% of these digital transactions came from various mobile devices. The pizza brand’s fellow competitors Domino’s and Pizza Hut are also heavily strategizing regarding their digital footprints. Both these companies have focussed on various video games, connected cars, and smart watches to tap customers. Domino’s has introduced the ‘zero-click ordering’ feature on its smartphone app. Last year, the company registered over 50% of its sales through digital medium in the U.S. Pizza Hut has also stated that its digital sales constitute about half of its total sales.

Wage Pressure Pushes Pizza Chains to Work on Digital Medium
Analysts have pointed out that with the introduction of recent legislation mandating minimum wages across some of the U.S. states, pizza chains are focusing on reducing manpower across their stores. Working through digital platforms allows pizza chains to afford fewer employees across their stores. In the first quarter, Domino’s registered lower-than-expected earnings as wage pressure weighed on the company’s operating margin. Papa John’s founder John Schnatter as accepted that going digital is the best way to counter the wage pressure. Online platform makes it easier to fulfil orders in record time. For example, during Super Bowl Sunday, Pizza Hut fulfilled orders worth US$12 mn through digital channels. It is interesting to note that not only pizza chains but Starbucks is also following the digital way.

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